Diversification Calculator
Calculate the optimal asset allocation for your investment portfolio to reduce risk and maximize returns. Determine proper diversification based on your risk tolerance, investment horizon, and financial goals.
Step 1: Portfolio Details
Understanding Portfolio Diversification
Diversification reduces risk by spreading investments across different asset classes. A well-diversified portfolio typically includes stocks, bonds, real estate, and international investments.
Step 2: Risk & Preferences
About Risk Management
Younger investors with longer time horizons can typically tolerate more risk. As you approach retirement, shifting toward more conservative investments helps protect your capital.
Portfolio Diversification Results
Recommended Risk Level
Asset Class Comparison
| Asset Class | Average Return | Risk Level | Recommended % |
|---|
Portfolio Allocation Breakdown
Diversification Benefits
Risk Reduction = √(1/N) × Portfolio Volatility
Adding uncorrelated assets reduces overall portfolio risk. The optimal number of assets depends on correlation coefficients and individual asset volatilities.
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